Three Things California Med Spas Need to Know

Tuesday, August 8, 2017

By: Alex Thiersch

The state of California is a trendsetter for the medical esthetics industry, from a legal standpoint. Because of the huge number of practices in the state, the California Board of Barbering and Cosmetology is on the leading edge of regulatory progress, and its policies are highly influential throughout the country. Here are a few legal issues that med spa owners in California might not be aware of, but definitely need to know.

1. A med spa must be at least 51 percent owned by a physician

In states that observe the corporate practice of medicine, a medical aesthetics practice must be owned by a physician. In California, however, there is an exception that allows med spas to be owned in part by non-physicians, provided they are licensed medical practitioners, such as nurses, physician assistants, and nurse practitioners. These individuals may own up to 49 percent of a med spa in the Golden State. However, this still means that at least 51 percent of the practice must be owned by a physician. This ensures that clinical decisions are made by doctors and that the money coming into the practice is paid to a physician or physician-owned corporation, which is consistent with the corporate practice of medicine, but it also allows equity in the practice to be spread around to others who may have a greater influence on what goes on at the facility on a day-to-day basis.

If an unlicensed entrepreneur wants to become a part of the medical aesthetics industry on an ownership level in California, he or she can set up a management services organization (MSO), which partners with a physician, for whom a separate company is created; the physician’s company strictly provides medical services. This arrangement is known as a management service agreement (MSA), and it allows a non-physician to supervise most aspects of a medical aesthetics business apart from the administration of medical services.

2. A med spa must obtain an establishment license

In California, any medical aesthetics practice that offers aesthetic services – including facials, light skin peels and superficial microdermabrasion – must register for an establishment license with the Board of Barbering and Cosmetology. This regulatory agency oversees aestheticians, and it has determined that if an establishment is going to offer aesthetic services, it must be licensed as an establishment. On several occasions, the board has investigated and fined med spas that have failed to procure this license, and in some instances, it has even barred practices from offering these services.

Many med spa owners and operators do not realize that they need an establishment license in order to provide aesthetic services, but because of the potential consequences, it is, in fact, critical to their business. Obtaining an establishment license is a fairly straightforward process – simply download the PDF on the board’s website, provide all the requested information, and include your payment.

On a related note, the scope of services that can be offered by aestheticians in California is a somewhat controversial matter. Here is a video from AmSpa’s 2016 San Jose Boot Camp, in which board representatives explain what services an aesthetician can and cannot provide in the state of California.

3. All medical aesthetics practices that are using a separate business name must register that name with the medical board

Medical aesthetics practices typically take on “doing business as” (dba) names such as “Bliss Medical Spa” or “Orange County Medical Spa,” instead of operating under the owner’s name, as a matter of course. But if you do this in California, you must register that dba name with the state's medical board.

This is something that many med spas do not do, but the board takes such omissions very seriously. If a med spa does not provide this information, the board may view it as a failure to obtain a proper license, and it may even go after the practice for misrepresenting itself in its marketing, provided it is presenting itself as, say, “Amethyst Med Spa” rather than “Dr. Thiersch, PC,” for example. In order to do this legally, the board must acknowledge that the name is tied to the doctor who is using it.

We will be discussing these and many other legal topics of interest to California med spas at our San Jose Boot Camp, which will take place on Sept. 18 and 19. We have reached out to both the California Board of Barbering and Cosmetology and the Medical Board of California, and we hope members of both will pop in to answer any legal and regulatory issues attendees may have. Click here for more information and to register for the Boot Camp. We hope to see you there!